SOFTWARE FIRM TAPS INDIA CONNECTION

Software developer Westbound Consulting LLC calls Chicago's Lake View neighborhood home -- even though its base of operations is 7,000 miles, 11 1/2 time zones and 8,000 frequent-flier miles away.

Frustrated by a shortage of computer programmers in the U.S., Westbound set up shop in India, where the talent pool is overflowing.

A number of U.S.-based technology firms in recent years have opened satellite offices or outsourced work to programmers in India, where computer engineering is the fastest-growing industry.

Westbound is going one step further. While its corporate headquarters remains here, the bulk of its workforce is housed in a four-story, state-of-the-art facility in Hyderabad, Andhra Pradesh, southeast of Bombay.

"(Westbound) is certainly on the edge of a trend; I don't know of any other firm in Chicago set up this way," says Thomas Thornton, president of the Illinois Coalition, a non-profit organization that assists high-tech startups. "Turning to India and its huge corpus of highly trained information technology specialists is one way companies are addressing the shortage of talent here."

Westbound, which employs 25 computer engineers, develops systems software for a handful of companies in industries ranging from construction to electronic commerce. The company anticipates 1999 revenues of $1 million and expects to double sales in each of the next three years.

Partners Nathan Weersing and Suresh Redyam started Westbound last year. Both have extensive backgrounds in systems consultancy and project management. But perhaps most important, Mr. Redyam has connections in India.

"It's the most important thing if you're starting up a business there," says 26-year-old Mr. Weersing, Westbound's president. "If you want to get into a prime location and you don't have a local presence, you can bet you're going to have to pay as much as you do in the States."

And if employees are the reason technology companies turn to India, cost is the reason they stay.

Mr. Weersing estimates the cost of doing business in India is 25% of the U.S. cost -- and in Hyderabad, foreign investors are given a five-year tax holiday.

Most of the savings come from lower salaries. While Western programmers command $50,000 to $100,000 annually, Westbound's employees make roughly $6,000 a year, payable in rupees, the local currency. That puts them in the area's top 1% of wage earners. They also receive transportation and medical allowances.

"The cost (of these benefits) is so negligible, I haven't even noticed it," says Rao Tummalapalli, Westbound's chief technical officer and managing director of the India site.

Westbound spent one year looking for someone with Mr. Tummalapalli's qualifications. A native of India, he studied and worked in the technology field in the U.S. for 10 years.

"The single largest barrier to entry is getting someone with management experience in the U.S. to oversee your offshore operations," Mr. Weersing says.

Mr. Tummalapalli helped Mr. Redyam secure Westbound's Hyderabad location -- six miles from Microsoft Corp.'s foreign campus -- and hire a team of local programmers and engineers, most of whom he already knew.

"If you put an ad in the paper, you'll get 100 resumes a day," Mr. Tummalapalli says.